Governors face difficult Medicaid decisions

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Governors throughout the United States are struggling to find ways to cut Medicaid spending.

Arizona has taken more dramatic steps than other states, according to a Bloomberg news report. The state stopped covering heart, liver and other transplants in October, and plans to reduce payments to physicians, hospitals and ambulance services by 5% next April, the news service reported. Meanwhile, Washington Governor Christine Gregoire (D) has proposed cuts of $112.9 million in vision, hearing and other benefits for her 1.1 million-member Medicaid program. Gov. Arnold Schwarzenegger (R-CA) proposed $980 million in Medi-Cal savings.

Other states are looking for help from private insurers to lower expenses and encourage illness prevention and earlier intervention. Reducing spending has become harder as enrollment in Medicaid has gone up 13.6% since the beginning of the recession in 2007. Additional Medicaid stimulus funds to states are set to run out at the end of June.